Asia Fuel Oil-Steady with speculation on OPEC action in November

Asia’s fuel oil markets were little changed at the start of the week with front month 380-cst time spreads supported by bullish sentiment on flat prices ahead of the OPEC meeting in late November to discuss possible production cuts, industry sources said.

“Seems like some traders are speculating on a rise in flat price (of fuel oil) from higher crude oil prices which is why we’re seeing the prompt month time spreads holding up despite some downward pressure,” said a Singapore-based trader.

The prompt month Nov/Dec time spreads for the 380-cst fuel were trading at a premium of 25 cents a tonne on Monday, up 25 cents from the previous session.

Flat prices of 380-cst fuel oil FO380-SIN were slightly lower on Monday, settling $3.59 lower from Friday to $277.31 a tonne. On Oct. 12, spot prices of the 380-cst fuel reached $283.51 a tonne, their highest since July 30 last year.

This comes as the front month Dubai crude oil prices DUB-1M-A has risen to near one-year highs amid optimism of an OPEC deal, said another Singapore-based trader.

OPEC officials are embarking on an unusual flurry of meetings to nail down details of their deal to cut production to between 32.5 million barrels per day (bpd) and 33 million bpd agreed in Algiers on Sept. 28 to help balance supply and demand and revive prices that remain less than half of the levels reached in mid-2014.

RELATED NEWS

– Korea National Oil Corp (KNOC) on Monday said the government had told it to indefinitely halt construction of an underground storage tank following an accident late last week that killed two workers and injured others.

– Iran’s deputy oil minister said on Monday that the OPEC’s primary agreement in Algeria to limit oil output at 32.5 million barrels per day was a small step but in right direction.

SINGAPORE CASH TRADES: Three cash deals reported. For further details, please see